September 2016

What About Social Security?

My previous two posts share information from a study that was completed this year by the Harris Poll for Northwestern Mutual to investigate how many Americans will be prepared to retire and what are their concerns about the possibility of outliving their funds?

Social Security provides an iota of money each month to seniors but certainly not enough to pay ongoing cost of living expenses, medical expenses or caregiving costs and if the senior doesn’t have a pension or other funds to use, what are they going to do?

New Study Underscores Retirees’ Need for Non-Traditional Funding Sources
Posted By Jason Oliva On June 7, 2016 @ 5:32 pm In News,Retirement,Reverse Mortgage

“Non-retirees also plan to rely upon Social Security less than their retired counterparts, with 35% of non-retired Americans expecting this benefit will be their sole or primary source of retirement income, compared to 49% of current retirees.

Social Security is often one of the main sources of income for people over age 65. But this stalwart asset, which has long been considered one of the three legs of the traditional retirement stool, may soon face depletion by 2034, according to the Security Board of Trustees for the Social Security Administration in a report submitted to Congress last summer.

But while there has been some talk that reverse mortgages could support the traditional retirement stool, joining Social Security and personal savings as defined benefit pensions become increasingly less common, the acceptance of using housing wealth as a retirement funding source is hobbled by a widespread apprehension to borrow against home equity.”

American seniors currently retain over 12 trillion dollars in home equity and honestly?   In spite of the fear and misunderstanding of the Reverse loan, it will come to the rescue for many seniors and their families.

They are now affordable, even a No Costs version is available, non taxable because it’s not income, they continue to own their home, it never goes to the “Bank” and its very, very safe.

But then again,  I am a Reverse Loan Consultant…..

 

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Will I Outlive My Retirement Money?

Well, many Americans are very concerned about this probability because they simply don’t have a retirement plan or never bothered to set one up for themselves and now they are facing a scary future where they may not have enough money to sustain their lives.

The 2016 study that was done by the Harris Pole for Northwestern Mutual took a very serious look at the pending domestic crisis America is facing and not surprisingly, those who are approaching retirement   ( If they can retire) and those that have already retired, are worried about running out of money.

In a previous post, I shared the first part of an article that discusses this study and due to it’s length I will share part of it in this post, with the rest of it to follow.

New Study Underscores Retirees’ Need for Non-Traditional Funding Sources
Posted By Jason Oliva On June 7, 2016 @ 5:32 pm In News,Retirement,Reverse Mortgage

“Life expediencies continue to climb and that’s a good thing, however, Americans are increasingly less confident that their savings will last through retirement. Roughly two-thirds of survey respondents believe there is a chance they will outlive their savings, with 34% of this bunch saying the likelihood of this happening is 51% or better.

“The prospect of an extended retirement in an environment of diminishing safety nets makes it even more essential that your financial plan is flexible enough to stretch as long as needed,” said Rebekah Barsch, vice president of planning for Northwester Mutual, in a written statement.

The 2016 study results not only highlight the vast unpreparedness of American adults, but also underscores the need to look beyond traditional funding streams like Social Security to bolster retirement savings.”

Of course, as a Reverse Loan Consultant I know how valuable the FHA loan program is for preserving wealth and providing emotional security, but that is another topic.

People need to simply become educated about their benefits and why they should consider using them as part of a retirement plan.

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Are You Ready to Retire?

Various studies of Americans saving habits for retirement have been under review for quite some time and the consensus is that most Americans are underfunded in their retirement plans and most people are very concerned about outliving their savings.

Moving forward in the coming years, more seniors will seriously consider using a Reverse loan to stop the bleeding from their savings and leverage what they do happen to have, to last longer than the typical projection that a Financial Advisor may provide to their clients.

A study that was completed this year  looked in depth at what Americans are doing do save for the future, found that most are unprepared to retire and other dire concerns the will effect their ability to live comfortably.

Here is the first part of an article discussing this very serious, domestic situation that will have huge impacts on our seniors in the future.

New Study Underscores Retirees’ Need for Non-Traditional Funding Sources
Posted By Jason Oliva On June 7, 2016 @ 5:32 pm In News,Retirement,Reverse Mortgage

“As increasing longevity continues to stretch personal savings thin, a recent study suggests Americans will need to look beyond traditional funding sources if they want their retirement to last for the long haul.

Americans are living longer than ever before, yet many are still not taking the necessary steps to financially plan for their future, according to the 2016 Northwestern Mutual Planning & Progress Study. Out of more than 2,000 people aged 18 or older, only 21% say they have increased their savings in efforts to prepare for retirement, whereas 44% report having taken no steps at all.

The 2016 study, which Harris Poll conducted on behalf of Northwestern Mutual, explores the state of financial planning in the U.S. today, providing insights into the money behaviors and priorities of American adults.”

Due to the length of this article I will follow up with additional posts, sharing it in it’s entirety.

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Confused About Reverse Loans?

I have been a Reverse Loan Consultant for almost 15 years and when I first started in this amazing and wonderful industry, the fees were very costly but that has changed over the last several years and the loan has become a terrific option to utilize one’s equity without being obligated to make mortgage payments each month.

My previous post was part of an article that I will share the remainder of here, but it discussed how much equity is in American seniors homes; well over $12 Trillion dollars and growing.

Seniors number 1 concern, is outliving their money.  Let’s face it.   No one can  live on Social Security and if one is fortunate enough to have a pension and investments, there is the concern about drawing down on them too soon and…

Running out of money.

A Reverse loan can eliminate that fear and worry and if a senior would get over their fear an bias about them, they will find out that they are very affordable.

As a matter of fact, I can offer a No Cost Reverse loan.    It just depends upon the size of the loan.

And the Title stays in their name or Trust AND THE BANK NEVER TAKES OVER THE PROPERTY.

Here is the remainder of the article that I’m carry over from the previous post.
The Street: Education is Key When Discussing Reverse Mortgages

September 5th, 2016 | by Alana Stramowski Published in News, Reverse Mortgage

There are some facts that homeowners need to know before taking out a reverse mortgage though. A small, but important detail that often is overlooked is the fact that the amount withdrawn during the initial year of taking out a reverse mortgage determines the mortgage insurance premium when the loan is closes.
The fees used to be extremely high, in some cases, but now, the Department of Housing and Urban Development (HUD) limits origination feed to just 2% of the first 200,000 of the maximum claim amount plus 1% of additional home value, but not exceeding at total of $6,000. according to the article.
Reverse mortgages can be extremely complicated for those homeowners taking a look for the first time, but with the proper education, they can see how the product could benefit them to support their overall retirement plan.
Read the full article on The Street.
Written by Alana Stramowski

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Who has $12.5 Trillion Dollars?

American seniors do and it seems to me that this figure keeps growing each month.   It wasn’t too long ago when it was at $ 5.5 trillion dollars and I thought, that was a lot of money to have in one’s home.

Reverse loans have been around for a number of years and as we head into the void of a lack of retirement funds that most people simply don’t have enough of…..there is a looming question as to how all of their needs will be managed as they age.

The Street recently published an article about this massive amount of equity that seniors have available to them to supplement their retirement, but many are still afraid of the HECM FHA loan program and do not see it as an option to extend their retirement savings.

Here is the first part of the article.

The Street: Education is Key When Discussing Reverse Mortgages

September 5th, 2016 | by Alana Stramowski Published in News, Reverse Mortgage

With the amount of equity floating around in the U.S., reverse mortgages could be a good a good financial decision in the right circumstance, explains a recent article on The Street.
There is $12.5 trillion in home equity in America and about $14 trillion in retirement assets, according to the article. Reverse mortgages could be used by homeowners 62 and older to help supplement Social Security and other existing income sources like medical expenses, long vacations or even purchase a new home.
A perk about the product that the public was often confused about in the past is that homeowners will never relinquish title to their homes. “The reverse mortgage enables seniors with insufficient income to tap their home equity without selling their domicile,” the article says. “Moreover, the income can make it possible for a retiree to deal taking Social Security payments in favor of larger payments down the road.”

I will share the remainder of this article in my next Post.

 

 

 

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